Gold Prices Turn Choppy

Gold prices moved higher yesterday as the prices continue to oscillate with no specific direction. As we had mentioned in our forecast yesterday, there does not seem to be any fundamental drivers for the gold prices as yet and that has left the prices to the mercy of the factors like dollar strength and global risk. This has made trading in gold difficult for speculators and day traders though the overall direction seems to be down for the short and medium term. Yesterday, the gold bulls got some relief from all the selling that they had been made to endure over the past couple of weeks as the prices recovered on general dollar weakness across the board. But as with many instruments, this move has to be viewed with suspicion as it was the first day of the week when the volatility and the liquidity are generally low.

Gold Bounces Again

We continue to believe that the gold prices are set to move lower in the short and medium term as the stock markets around the world pick up steam and move higher. The interest rates in the major countries are also an important factor in determining the gold prices and with many countries coming to the end of their rate cut cycle and beginning their rate hike cycle, it adds to the pressure on the gold prices as the returns from the interest rates, bonds and stock markets begin to outweigh the returns in gold. This leads to a pullout of funds from the gold and silver markets which leads the prices lower for gold and silver as well.

Oil prices continue to consolidate and range for another day yesterday as there have been very few fundamental factors pushing the oil prices in either direction at this point of time. The oil prices have been left to the vagaries of the production and supply data and this has led to some choppy trading over the last few days as the prices approach a crucial region between $53 and $55. This kind of choppy trading is set to continue in the short term as well.

Silver prices have also generally moved higher, in line with what the gold prices have been doing over the last 24 hours. But this is not expected to continue in the short or medium term and the prices are expected to correct lower in the short and medium term.